Govt to extend FCA benefits to domestic, agricultural power consumers

ISLAMABAD: The government has decided to extend the benefits of lower Fuel Cost Adjustment (FCA) to domestic electricity consumers using up to 300 units per month, as well as to agricultural consumers.

According to the Power Division, policy guidelines issued by the ECC of the Cabinet on May 21, 2015, stated that any negative FCA adjustments would not be passed on to domestic consumers who benefit from subsidised electricity rates.

On June 24, 2015, the authority ruled that negative FCA adjustments would not apply to non-Time of Use (non-TOU) domestic consumers using up to 300 units. This policy of excluding agricultural consumers from receiving FCA benefits has been in place since November 2010.

In a letter dated June 9, 2021, the Ministry of Energy proposed new guidelines to re-target power subsidies for the future.

As a result, the authority created new categories for domestic consumers – protected and non-protected non-TOU users – in a decision made on September 23, 2021.

Since the introduction of these categories, the tariffs for non-protected consumers have gradually increased in line with government policy.

However, the Power Division has highlighted that continuing to exclude non-protected domestic and agricultural consumers from FCA benefits may no longer align with the principles behind earlier decisions.

The Power Division has, therefore, requested the National Electric Power Regulatory Authority (Nepra) to reconsider this policy and potentially allow non-protected domestic and agricultural consumers to benefit from negative FCA adjustments.

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